The Body Shop International PLC 2001: An Introduction to Financial Modeling The following graph presents the forecast for the Body Shop’s income statement and balance sheet in 2002 to 2004:

How did you derive your forecast? Why did you choose the “base case” assumptions that you did? The forecast takes into considerations the stated business objectives of the Body Shop as well as trends or patterns in the historical financial statement in exhibit 8. Further information on the calculations and assumptions underlying the forecast is to be explained for each account individually in the following section: Assumptions related to the sales growth, expenses and earnings parameters Sales growth: Given the Body Shop’s growth level of 20% in the early 1990’s and its newly implemented strategy, it is assumed that the Body Shop will be able to sustain a relatively high growth rate in the future years, however the Body it will not be able to generate sales growth at the early 1990’s level due to increased competition in the market. In 2000 the sales increased by 8.7 % and in 2001 it increased by 13.3% The Body Shop’s sales are forecasted to increase by 11 % per year in 2002, 2003 and 2004. Thus, it is assumed that the past years trend of increasing sales growth will continue until 2004, however at a steady rate of 11 % per year, which is the average of the past two years growth rate. Cost of Goods Sold (COGS): It is assumed that the cost of goods sold will stay at a constant level in the forecast for 2002 - 2004. It is estimated as a weighted average of the COGS/Sales-ratios in 1999, 2000 and 2001 equal to 40.5 %. Operating expenses: Exceptional costs and restructuring costs: Since the Body Shop’s business strategy includes achieving operational efficiency in its supply chain it is assumed that the Body Shop will also have exceptional costs and restructuring costs in 2002 to 2004 as a consequence of the desired goal to achieve efficiency improvements in its supply chain....

YOU MAY ALSO FIND THESE DOCUMENTS HELPFUL

...The BodyShop was one of the fastest growing manufacturer- retailers in the late 1990s. However, throughout the years, they failed to maintain its brand image by becoming something of a mass-market line. Anita Roddick, the shops founder and Patrick Gournay, CEO are looking for assistance in short and long-term planning for The BodyShop. The goal is to yield practical insights while being straightforward. To get started, we...

...﻿Executive Summary
The BodyShopInternationalPLC was once one of the fastest growing manufacturer-retailers, but in a decade’s time their revenue growth slowed from 20% to nearly 8%. These types of results were not uncommon in companies who are experiencing rapid growth but this was a dramatic decrease and, needless to say, a wake up call to management. Competition was increasing and The BodyShop had failed...

...founder, The BodyShopInternational
In the late 1990s, The BodyShopInternationalPLC, previously one of the fastest growing manufacturer-retailers in the world, ran aground. Although the firm had an annual revenue growth rate of 20% in the early to middle 1990s, by the late 1990s, revenue growth slowed to around 8%. New retailers of the naturally based skin- and hair-care products entered...

...Executive Summary
The BodyShopInternationalPLC has been facing a myriad of issues in the late 1990s. At its creation, the bodyshop has seen tremendous growth and success. The company thrived to bring a new revolutionary business model and was extremely successful. But after those successful years in the early 1990s, the competition became fierce as new entrants came and absorbed parts of the market. This...

...three-year earnings and financial needs of The BodyShop. Due to lack of information, this forecast based on some key assumptions about the relationship between sales and other accounting ratios, firstly forecast sales then forecast other ratios in financial statements.
Sales: It is assumed that sales growth ratio will maintain at 11% next three years due to the need of increasing revenue of The BodyShop. This figure is the average...

...The BodyShopInternationalCaseStudy
1. The assumptions that were used to derive the numbers in this forecast were found by taking the averages of the historical data that was given for 1999-2001. Instead of using the assumptions that were given by The BodyShop, I thought it would be more practical to use the trends shown in the historical data since that is more relevant...

...The BodyShopInternationalCaseStudy
The Creator- When one read the words The BodyShop one would think of working on cars. Not for Mrs. Anita Roddick, she thought of The BodyShop as a way to give women what they had been looking for in cosmetics. Mrs. Anita Roddick was born in England in 1942, to Italian immigrants. She was a human rights activist and an...

...History of The BodyShopInternational
In the early to mid 90's, the revenue growth for The BodyShop was at least 20% each year. The BodyShop was able to grow at a fast pace early in the decade because of the lack of competition. Over the course of the decade, competition grew fierce, and, by the end of the decade, revenue growth fell to 8%. Another reason for the slow growth in the late...